Monday, April 27, 2015

Grand Canyon River Running and Its Political Status Quo; An Outsider's View of Changes and Potential Change

So how has the economic organization of the River running oligopoly fared since I summarized it in 2003?* Tightened a bit, I would say. 

To summarize the background, (and see the pages from my book below), the events of the 1970's climaxed as a result of the 1980 election that brought the Reagan administration into power, including the motorized commercial operators' (comm ops) legal champion, James Watt, as Secretary of the Interior. At the same time, the Republicans gained a majority in the Senate, empowering the pro-comm op Senators, Barry Goldwater of Arizona and Orrin Hatch of Utah. This capped a dozen years of struggle over river traffic management as the National Park Service and Grand Canyon advocates 1. tried to get a motorless Grand Canyon Wilderness established, and 2. tried to develop & implement a research-based, environmentally sound, experience-enhancing Colorado River Management Plan (CRMP). The struggle resulted from the resistance of the comm ops, particularly those using large motor-driven rafts. 

The effect of the 1980 election was a political de-railing of both the Wilderness and the CRMP, marked by the passage of the infamous Hatch amendment. This political "settlement" of the main issues was locked into place by a comm op-friendly CRMP revision developed and then administered by new Grand Canyon National Park Superintendent R. Marks, who not only lasted through the 1980's, but presided over a further CRMP updating (solidification) at the end of that decade. 

The 1980 political settlement was truly one of emplacing the status quo. What has always intrigued me is that the  comm ops did not take advantage of their big victory to insist on resuming their steady increase in the amount of people they could run through the Canyon. Instead, with minor tweaks, the commercial allocation of use remained almost the same as that imposed in 1972 as a supposedly temporary (and also political) fix of the out-of-control traffic increases of the 1960's. [The coordinate struggle over running the Canyon by individuals who want to do it themselves instead of as comm op passengers is another story.]

So what has happened to the economic structure of the  comm ops? There were 21 of them  in 1972 -- the number of contracts issued when the Park first moved to long-term concessions. That dropped to 15 in 2003 through various moves, mostly by insiders (see book excerpts below for description and the lists), which again had little effect on the underlying structure of user-day allocation. And that is the big point to make about the status quo being maintained. But before getting to that, let me see if I can re-state who is whom and has what.

There are 15 companies listed on the GCNP website, only three (marked by R) run all rowing trips.
The owner line-up shows these 12.**

    Aramark (big corporation; from outside of the families)  
    Arizona River Runners (bought out by non-family)  
          incl. Grand Canyon Whitewater 
    Canyoneers    (Staveley family)
R   Canyon Explorations/Canyon Expeditions  (Schniewind, with a Staveley family member)
    Colorado River and Trail Expeditions (MacKay, founder)
    Grand Canyon Expeditions (Ron Smith founded; sold on to employees)
    Grand Canyon Raft Adventures  (AZRA; Elliott family, 2nd gen + employee)
          incl. Grand Canyon Discovery & Moki Mac
    Hatch River Expeditions (Hatch family; 3rd gen.)
R   OARS   (Geo Wendt; 2nd gen)
R   Outdoors Unlimited (John Vail; and as a young man, his & my first Canyon trip was with 
  Litton in 1966 )  
     Tour West (2nd gen.)
     Western (founded by Currey; sold out to outsiders) 

Founders & Families control 9; outsiders bought 3. Well, thats a debatable division, but it reinforces the impression that continuing ownership reflects the maintenance of the status quo.

Heres how the few changes of the recent past went:
Ken Sleight's Wonderland Expeditions in 1955 became Ken Sleight River
Expeditions in 1979 and then Mark Sleight Expeditions in 1984, then High
Desert Adventures in 1997, was renamed Grand Canyon Discovery and bought by Rob Elliot of AZRA in 2004, with new family owners but not re-named in 2008. Its control now is in Grand Canyon Raft Adventures.

More recently, Moki Mac's founders sold to Grand Canyon Raft Adventures. Others in the list above may well be coming to a time when selling out is an attractive option. Indeed, the founders of some companies have made room for a succeeding generation.

Grand Canyon Whitewater was formed in 2011, from Diamond River Adventures, that had been formed in 1979 from Sanderson on one hand and Harris Boat Trips on the
other. Grand Canyon Whitewater is now owned by the same folks who bought out the Burkes of Arizona River Runners .

This gives us a listing, maybe not perfect, of owners. The user-days on the right are based on the 2001 listing, distributing the three changes.

Aramark, a publicly held corporation, owns Wilderness River Adventures   9,132
Gloeckler, Winter and others own Arizona River Runners and Grand 17,273
  Canyon Whitewater
The Schniewind's (including a Staveley son by marriage) own Canyon   6,045
  Expeditions and Canyon Explorations
The Staveley's own Canyoneers   4,060
The Mackay's own Colorado River and Trails   2,500
Denoyer, Mathis and others own Grand Canyon Expeditions 13,257 
The Thevenins own GCRA incl Grand Canyon Discovery & Moki Mac 16,052
The Hatches own Hatch River Expeditions   10,656
Wendt (& son) own OARS   4,912
Vail owns Outdoors Unlimited           4,478
Harding and Stratton own Tour West   4,480
Keller, George and Lake own Western River Expeditions 13,251

Does this have an overall meaning? 

It has come with the 35-year dominance of a keep-it-in-the-family attitude. Of the remaining 12, only 3-4 have come from outside. Another trick has been the NPS insisting on the integrity of the contracts, locking in numbers and operations as an easy way of maintaining the status quo. The questions revolving around concession fees, and the effect that the current arrangement has on those fees are not ones that will be publicly discussed. Indeed public discussion of the concession oligopoly has seemingly disappeared, while in the 1970's I was able to attend the gatherings of river companies at the Park.

The hold-the-line policy enforced by NPS forecloses changes that might well broaden and enrich the visitor experience by offering greater variety. But like the question of whether the current policy is best for the public treasury, there is no discussion. Thus, when a comm op gives up the ghost, instead of violating the spirit of the law that says allocations cannot be bought and sold, NPS ratified sales and absorptions. 
There are other options. NPS could have 
1. eliminated those user-days so as to deal with environmental/crowding issues. The status quo can hardly admit there are still such issues.  
2. re-assigned the released user-days to trips which the boating public choose to run themselves, the allocation of which is heavily under-served due to the decades-long bias against such trips evidenced in NPS policies and procedures.
3. put out the empty spot in some kind of auction to encourage competition, diversity, and new thinking.

Well, here is a test of the arrangement: Would it not be to the advantage of NPS and the  comm ops to avoid or minimize a new or revised River Plan? Why go through the bother of revising the Plan and the contracts based on it, when the status quo is satisfactory?

On the other hand, it would seem something has to crack in the status quo; there are a number of the remaining companies at least nominally headed by aged owners. For some, the next generation has already moved into place. Others must, one might speculate, notice the metaphoric vultures (not to demean condors) circling. Can they vacate their spot and as has been done so far, remuneratively pass on their allocation to one of the existing comm ops? Will second- and third-generation would-be operators (in the families or possibly employee groups) be able to take over without any bumps, ensuring that the status quo persists? Very interestingly, would the Park Service dare to 1. encourage consolidation, even trying to reduce the number of commercial entities to a handful, or even just a couple, or only one monopolist? Or 2. decide to opt for a more open arrangement to increase the chance for change in the coming decades?

From Hijacking A River, A Political History of the Colorado River in the Grand Canyon (pp 421-2), published 2004):

*I am indebted to Tom Martin of River Runners for Wilderness (website: for helping me put this update together.
**An overall picture and many more details can be found in C V Abyssus, "The Begats: Grand Canyon River Outfitter Genealogy", "Boatman's Quarterly Review, Vol. 26 No. 4:
R Quartaroli helped her out.

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